Section 1 Quiz

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Section 1 Quiz

This quiz covers material from Section 1, which includes "Lesson 1: The Basics" through "Lesson 3: Getting Started."

What is a stock? *

1 point

One piece of a company

All of the shares that make up the ownership of a company

A contract you can buy to buy 100 shares

A professionally managed fund that pools investors' money

True of False? A company is required to pay dividends. *

1 point

True

False

What does a positive Alpha for a portfolio mean? *

1 point

The portfolio is more volatile than a market index

The portfolio earned a higher return than a market index

The portfolio has a high dividend yield

The portfolio has doubled in value

What is the formula for the Rule of 72? *

1 point

r = t / 72

t = 72 / r

72 = t / r

72r = t

Which type of stock is one that is currently priced below its intrinsic value? *

1 point

Value

Growth

Dividend

Momentum

Which type of option contract should an investor buy if they believe the stock's price will increase? *

1 point

Call

Put

What is it called when an option contract becomes void? *

1 point

Strike Price

At the Money

Expiration Date

Delta

If an investor believes a stock's price is going to decrease, what could they do to earn a return? Please select all that apply. *

1 point

Short the stock

Buy a Put Option

Buy a Call Option

Long the Stock

Required

Which of the following is NOT a term for the difference between a stock's price and an option contract's strike price? *

1 point

At the Money

Out of the Money

On the Money

In the Money

Which of the following are examples of alternative investments? Please select all that apply. *

1 point

Cryptocurrency

Future Contracts

Forex

Commodities

Required

What is it called when the price of goods increase? *

1 point

Yield Rise

Cycle

Inflation

Deflation

What could be a cause of inflation? *

1 point

Decrease in money supply

Increase in demand

Increase in supply

None of the Above

What does the yield curve represent? *

1 point

The relationship between interest rates and maturity dates

The return expected in the current business cycle

A measure of all final goods in services

A measure of inflation vs. deflation

What is TIPS? *

1 point

Total Index Predetermined Service. A basket of stocks within a certain index trading at a certain price

Time-Influenced Premium Service. An investment that returns a higher yield depending on the length you hold onto it

Treasury Inflation-Protection Securities. An investment that increases with inflation and decreases with deflation

Total Investment Premium Securities. A fee that must be paid for buying stocks at a lower price than their share price

True or False? A sector is larger than an industry. *

1 point

True

False

An investor should always strive for... *

1 point

Investing

Speculating

What are the three main steps involving risk while investing? Please select all that apply. *

1 point

Understand

Recognize

Simplify

Control

Required

How does an investor avoid FOMO? *

1 point

Pay attention to the news and listen closely to what everyone else is buying

Do not buy something just because everyone else is buying

Buying after everyone else has already bought to lower risk

Trading with emotions to justify your positions

What is contrarianism? Please select all that apply. *

1 point

To follow the crowd

To go against the crowd

To come to the same conclusion as the rest of the market

To come to a separate conclusion as the market or before the market does

Required

What are some of your advantages as a retail investor? Please select all that apply. *

1 point

You can buy whatever you want

You do not need to explain your holdings

You do not need to work with others' money

You have others to help your investments

Required

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